October 12, 2011: Yesterday, Gladstone Capital (ticker: GLAD) announced that its board of directors declared monthly cash distributions of $0.07 per share of common stock for each of the months October, November and December of 2011. For a table showing the dividend and the pay-date, check out the press release.
BDC Reporter’s Two Cents: Gladstone Capital has been around for many years, but has been bedeviled by a loan portfolio still in the process of being turned around two years after the end of the Great Recession. The Company has been unable to raise new equity capital or access longer term debt financing on acceptable terms (not even through the SBIC). Still, management is hanging tough and continues to pay a regular, and unchanged dividend. In fact, GLAD has been paying 7 cents a share a month since April 2009. (However, that was a 50% reduction off the prior dividend, reflecting the turmoil associated with being dumped by its main lender in the middle of the crisis and needing to fire sale many of its assets).
Stock price-wise, the Company used to be a market darling but sentiment has changed. The price is down 41% from its 52 week high, the second worst performer in this category amongst the thirty companies we track. The stock is at $7.15, so the yield comes in at 11.7%. The price is 10% off the 52 week low in case anyone is wondering. The projected analyst earnings are for $0.91 for FY 2012 (September year-end) , which is an increase over the 2011 projection of $0.87. The forward PE is 7.9x.
